Correlation Between Tongding Interconnection and China Marine
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By analyzing existing cross correlation between Tongding Interconnection Information and China Marine Information, you can compare the effects of market volatilities on Tongding Interconnection and China Marine and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tongding Interconnection with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongding Interconnection and China Marine.
Diversification Opportunities for Tongding Interconnection and China Marine
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tongding and China is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tongding Interconnection Infor and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information and Tongding Interconnection is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tongding Interconnection Information are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Tongding Interconnection i.e., Tongding Interconnection and China Marine go up and down completely randomly.
Pair Corralation between Tongding Interconnection and China Marine
Assuming the 90 days trading horizon Tongding Interconnection is expected to generate 1.85 times less return on investment than China Marine. But when comparing it to its historical volatility, Tongding Interconnection Information is 1.07 times less risky than China Marine. It trades about 0.06 of its potential returns per unit of risk. China Marine Information is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,889 in China Marine Information on August 28, 2024 and sell it today you would earn a total of 781.00 from holding China Marine Information or generate 41.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongding Interconnection Infor vs. China Marine Information
Performance |
| Timeline |
| Tongding Interconnection |
| China Marine Information |
Tongding Interconnection and China Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongding Interconnection and China Marine
The main advantage of trading using opposite Tongding Interconnection and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongding Interconnection position performs unexpectedly, China Marine can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Marine will offset losses from the drop in China Marine's long position.The idea behind Tongding Interconnection Information and China Marine Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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